Privitization is not optimal for government

December 14, 2012

Privatization of government functions is held as the gold standard of efficiency and economy even though there is little evidence to support this pernicious myth. Indeed as the cost of public services becomes more expensive, one can look at the record of advocates ignoring the corporate overhead and profits and the inefficiencies in corporate America when touting privatization as the answer to all government service problems.

If you want to pay tolls to go from home to work, you can choose to do so in many parts of America now. You still have to drive over public streets to get to the toll entrance.

The obscene salaries paid the hired guns, cooks, and support people that join our military service personnel come with an additional cost burden of corporate profit and overhead. Seems we didn't learn anything from the Revolutionary War and the Hessians. I doubt any GI ever loved KP but they may like less the thought that even the cook gets more than they do. Haliburton's profits during the Bush-Cheney years seemed to soar but the Iraq War did not seem to go better because of that.

While we have a long history of using contractors to build roads, normal road maintenance is usually a state or local responsibility and privatizing that part would just make the budget crunch worse and the roads more poorly maintained since private contractors don't come cheap.

Our Social Security Administration was required to privatize its bill paying and reporting functions on an experimental basis years ago. Did we save money or speed up the process? I have not read any unbiased reports but I doubt it. Yet every contractor is a source of campaign contributions that keeps our Congress people trying to privatize even more government functions since Congress people only do math on how much is contributed to their campaign funds.

If the intent in the halls of Congress is to balance the budget, privatization is not a cost effective way. It does make for more campaign contributions not better service.